Form 8396 is used to calculate the mortgage interest credit for a given tax year as well as any carryforward to a future year. The mortgage interest credit is only available to those who were issued a qualified Mortgage Credit Certificate (MCC) by a state or local government agency under a qualified mortgage credit certificate program for a main home located in the jurisdiction of the agency issuing the certificate. Certificates issued by the Federal Housing Administration, Department of Veterans Affairs, and Farmers Home Administration as well as Homestead Staff Exemption Certificates do not qualify for the credit. Also, if the interest on the mortgage was paid to a related person, then you cannot claim the credit. Part of the mortgage interest credit may not usable for the current year. If this is the case, the excess amount can carry forward to the subsequent year. Be aware, if you buy a home using a Mortgage Credit Certificate and sell it within nine years, you may have to recapture (repay) some of the credit.